Integrated Inventory And Inspection Policies For Stochastic Demand

In this paper, we develop integrated inventory inspection models with and without replacement of nonconforming items. Inspection policies include no inspection, sampling inspection, and 100% inspection. We consider a buyer who places an order from a supplier when his inventory level drops to a certain point, due to demand which is stochastic in nature. When a lot is received, the buyer uses some type of inspection policy. The fraction nonconforming is assumed to be a random variable following a beta distribution. The order quantity, reorder point and the inspection policy are decision variables. In the inspection policy involving determining sampling plan parameters, constraints on the buyer and manufacturer risks is set in order to obtain a fair plan for both parties. A solution procedure for determining the operating policies for inventory and inspection consisting of order quantity, sample size, and acceptance number is proposed. Numerical examples are presented to conduct a sensitivity analysis for important model parameters and to illustrate important issues about the developed models. (c) 2007 Elsevier B.V. All rights reserved

Integrated Inventory And Inspection Policies For Stochastic Demand

In this paper, we develop integrated inventory inspection models with and without replacement of nonconforming items. Inspection policies include no inspection, sampling inspection, and 100% inspection. We consider a buyer who places an order from a supplier when his inventory level drops to a certain point, due to demand which is stochastic in nature. When a lot is received, the buyer uses some type of inspection policy. The fraction nonconforming is assumed to be a random variable following a beta distribution. The order quantity, reorder point and the inspection policy are decision variables. In the inspection policy involving determining sampling plan parameters, constraints on the buyer and manufacturer risks is set in order to obtain a fair plan for both parties. A solution procedure for determining the operating policies for inventory and inspection consisting of order quantity, sample size, and acceptance number is proposed. Numerical examples are presented to conduct a sensitivity analysis for important model parameters and to illustrate important issues about the developed models. (c) 2007 Elsevier B.V. All rights reserved

Integrated Production-Distribution Planning with Considering Preventive Maintenance

The preventive maintenance activity is important thing in production system especially for a continuous production process, for example in fertilizer industry. Therefore, it has to be considered in production-distribution planning. This paper considers the interval of production facility’s preventive maintenance in production-distribution planning of multi echelon supply chain system which consists of a manufacturer with a continuous production process, a distribution center, a number of distributors and a number of retailers. The problem address in this paper is how to determine coordinated productiondistribution policies that considers the interval of production facility’s preventive maintenance, and customer demand only occurred at retailers and it fluctuates by time. Based on model of Santoso, et al. (2007), using the periodic review inventory model and a coordinated production and replenishment policies that are decided by central planning office and it must be obeyed by all entities of multi-echelon supply chain, the integrated production-distribution planning model is developed to determine the production and replenishment policies of all echelon in the supply chain system in order to minimize total system cost during planning horizon. Total system cost consists of set-up/ordering cost, maintenance cost, holding cost, outsourcing cost and transportation cost at all of entities. With considering preventive maintenance and there is one production run over the planning horizon, the replenishment cycle at distribution center, distributors and retailers that are found out are greater than the basic model. Also, the multiplication of replenishment cycle at distribution center in production cycle that is found out is greater than the basic model but the multiplication of replenishment cycle at retailers in its distributor are smaller than the basic model

Integrated production quality and condition-based maintenance optimisation for a stochastically deteriorating manufacturing system

This paper investigates the problem of optimally integrating production quality and condition-based maintenance in a stochastically deteriorating single- product, single-machine production system. Inspections are periodically performed on the system to assess its actual degradation status. The system is considered to be in ‘fail mode’ whenever its degradation level exceeds a predetermined threshold. The proportion of non-conforming items, those that are produced during the time interval where the degradation is beyond the specification threshold, are replaced either via overtime production or spot market purchases. To optimise preventive maintenance costs and at the same time reduce production of non-conforming items, the degradation of the system must be optimally monitored so that preventive maintenance is carried out at appropriate time intervals. In this paper, an integrated optimisation model is developed to determine the optimal inspection cycle and the degradation threshold level, beyond which preventive maintenance should be carried out, while minimising the sum of inspection and maintenance costs, in addition to the production of non-conforming items and inventory costs. An expression for the total expected cost rate over an infinite time horizon is developed and solution method for the resulting model is discussed. Numerical experiments are provided to illustrate the proposed approach

Warehousing and Inventory Management in Dual Channel and Global Supply Chains

More firms are adopting the dual-channel supply chain business model where firms offer their products to customers using dual-channel sales (to offer the item to customers online and offline). The development periods of innovative products have been shortened, especially for high-tech companies, which leads to products with short life cycles. This means that companies need to put their new products on the market as soon as possible. The dual-channel supply chain is a perfect tool to increase the customer’s awareness of new products and to keep customers’ loyalty; firms can offer new products online to the customer faster compared to the traditional retail sales channel. The emergence of dual-channel firms was mainly driven by the expansion in internet use and the advances in information and manufacturing technologies. No existing research has examined inventory strategies, warehouse structure, operations, and capacity in a dual-channel context. Additionally, firms are in need to integrate their global suppliers base; where the lower parts costs compensate for the much higher procurement and cross-border costs; in their supply chain operations. The most common method used to integrate the global supplier base is the use of cross-dock, also known as Third Party Logistic (3PL). This study is motivated by real-world problem, no existing research has considered the optimization of cross-dock operations in terms of dock assignment, storage locations, inventory strategies, and lead time uncertainty in the context of a cross-docking system. In this dissertation, we first study the dual-channel warehouse in the dual-channel supply chain. One of the challenges in running the dual-channel warehouse is how to organize the warehouse and manage inventory to fulfill both online and offline (retailer) orders, where the orders from different channels have different features. A model for a dual-channel warehouse in a dual-channel supply chain is proposed, and a solution approach is developed in the case of deterministic and stochastic lead times. Ending up with numerical examples to highlight the model’s validity and its usefulness as a decision support tool. Second, we extend the first problem to include the global supplier and the cross-border time. The impact of global suppliers and the effect of the cross-border time on the dual-channel warehouse are studied. A cross-border dual-channel warehouse model in a dual-channel supply chain context is proposed. In addition to demand and lead time uncertainty, the cross-border time is included as stochastic parameter. Numerical results and managerial insights are also presented for this problem. Third, motivated by a real-world cross-dock problem, we perform a study at one of the big 3 automotive companies in the USA. The company faces the challenges of optimizing their operations and managing the items in the 3PL when introducing new products. Thus, we investigate a dock assignment problem that considers the dock capacity and storage space and a cross-dock layout. We propose an integrated model to combine the cross-dock assignment problem with cross-dock layout problem so that cross-dock operations can be coordinated effectively. In addition to lead time uncertainty, the cross-border time is included as stochastic parameter. Real case study and numerical results and managerial insights are also presented for this problem highlighting the cross-border effect. Solution methodologies, managerial insights, numerical analysis as well as conclusions and potential future study topics are also provided in this dissertation

Optimizing the integrated economic production quantity for a stochastically deteriorating production system under condition-based maintenance

This paper proposes a new integrated economic production quantity (EPQ) and condition-based maintenance (CBM) model for a stochastically deteriorating production system. Inspections are performed periodically to measure the real time degradation. The system fails (out-of-control) whenever its degradation is beyond a critical threshold level. In the out-of-control state, a proportion of nonconforming items are produced. To assess the degradation of the system and to increase the production of conforming items, preventive maintenance (PM) actions are carried out. An integrated EPQ and CBM optimization model that minimizes the total expected cost rate over an infinite time horizon is developed. The objective is to determine a joint optimal EPQ and PM strategy minimizing the sum of inspection/maintenance and setup costs, cost of nonconforming items in addition to inventory holding cost. Numerical experiments are provided to illustrate the proposed approach

LOGISTICS AND SUPPLY CHAIN STRATEGIES IN GRAIN EXPORTING

During the past decade, the grain shipping industry has become highly competitive and technologically advanced. These changes, along with the introduction of innovative shipping mechanisms, have made logistics management an important source of opportunity and risk for grain shippers. In this study, a stochastic simulation model was developed to evaluate the tradeoffs and effects of key variables on logistical performance in managing the grain supply chain. Average demurrage cost for the supply chain was $2.03 million with the greatest cost being for railcars and the least cost being for barges. Of the stochastic variables modeled, changes in export demand had the greatest impact on demurrage costs.Supply Chain, Grain Shipping, Logistics, Demurrage, Guaranteed Freight, Industrial Organization,

Linear integrated location-inventory models for service parts logistics network design

We present two integrated network design and inventory control problems in service-parts logistics systems. Such models are complicated due to demand uncertainty and highly nonlinear time-based service level constraints. Exploiting unique properties of the nonlinear constraints, we provide an equivalent linear formulation under part-warehouse service requirements, and an approximate linear formulation under part service requirements. Computational results indicate the superiority of our approach over existing approaches in the literature